Wednesday 14 March 2012 07.30 EDT
First published on Wednesday 14 March 2012 07.30 EDT

Chris Williamson, chief economist at Markit

The latest batch of labour market data point to stubbornly high unemployment, with hiring remaining subdued. Pay pressures were meanwhile again extremely muted, providing good news on the inflation front but bad news for hopes of a further revival in consumer spending.

Vacancy data meanwhile point to lacklustre demand for staff. The number of vacancies fell by 5,000 in February, representing a setback from increases in the previous two months, meaning vacancies continue to run well below levels seen in the years prior to the recession.

The business surveys suggest that hiring may pick up again, though a robust labour market recovery remains some way off. Recruitment agencies reported the largest increase in the number of people placed in permanent jobs for nine months in February, and the PMI surveys indicated an increase in private sector employment for the third month running, although in both cases the surveys point to only very modest improvements in demand for staff.

Companies remain reluctant to take on more staff in the face of ongoing economic uncertainty and weak demand, especially in consumer-facing markets.

Nida Ali, economic adviser to the Ernst & Young Item Club

The labour market is starting to show some signs of stabilisation. Once again unemployment has increased on both measures which is discouraging. However, the rate of increase has slowed markedly when compared to recent months and provides some comfort.

Overall, the outlook is still quite downbeat. Although there has been a raft of recent positive data for the UK economy in the early months of 2012, the improvement is unlikely to be enough to create more jobs. Unemployment is expected to continue edging up in the coming months, peaking only at the beginning of 2013, before it starts drifting downwards gradually.

Blerina Uruci, UK economist at Barclays Capital

The labour market has been in poor health for most of the past year and we expect this to continue in 2012. This weakness has been characterised by a fall in public sector employment, which was more pronounced than expected as local government shed jobs particularly aggressively. Its effects have been amplified by the slow pace at which private sector jobs were created. We currently forecast a weak recovery, which means that private sector job creation is likely to remain slow throughout this year.

Furthermore, output per worker in the UK is still some way below its pre-recession level and with productivity this low, firms are unlikely to increase hiring significantly. In fact, survey indicators suggest hiring intentions fell sharply at the end of 2011 and the number of vacancies remains close to recession levels.

The most striking feature of this release is the unexpectedly sharp fall in headline earning growth. High inflation and weak wage growth have led to a prolonged period of negative real earnings growth that has eroded consumers' purchasing power and led to household consumption making a negative contribution to GDP growth last year. We expect household consumption to start increasing towards the end of the year mainly as inflation pressures ease.

Frances Coulson, president of insolvency trade body R3

The increase that we have seen in unemployment levels is likely to lead to more people struggling with their personal finances. We know that a change in circumstances, such as unemployment, or even being out of work long-term can result in debts mounting.

Recent research by R3 has found that 18 million people are worried about their current level of debt, and 20% of people have no savings at all. What is even more worrying is that although 18 million people are concerned about their debt levels, only 1.4 million are likely to seek advice in the next six months. This equates to just one in 13 with debt worries likely to do something about it.

This is set against record levels of personal insolvencies, and nearly a third (32%) of people thinking their personal financial situation will worsen in the next six months. We are also still seeing 'zombie debtors', with 6% of people saying they are paying the interest on their credit card but not reducing the debt itself, a situation which may well be exacerbated if someone is unemployed. It is vital that people experiencing difficulty seek advice early to avoid challenging circumstances leading to an unavoidable bankruptcy.

David Birne, an insolvency specialist at accountants HW Fisher

That the unemployment rate has slowed is of zero solace to the 28,000 people who joined the dole queue in January. Those seeking silver linings will seize on the fact that the rate of increase is slowing markedly. But any suggestion that unemployment is peaking sounds optimistic at best and complacent at worst.

It is encouraging that 9,000 new jobs were created, but the simple fact is that the private sector cannot create enough jobs to absorb those being shed by the public sector.

The SME sector, rightly seen as the engine of the economy, is struggling to get out of neutral. Business confidence is still very low and it's a bold company indeed that wants to recruit right now. Many small businesses are still being driven to the wall by cashflow problems, and banks' persistent reluctance to lend is making the problem worse.

The hope has always been that the private sector would ride to the rescue of those cast off by the shrinking public sector. But the rescue mission is going nowhere – as small businesses are held back by a dearth of finance and fears over fragile demand.